With over 8 million employees in the UK receiving furlough through the CJRS recruitment agencies are seeking alternative options to umbrella but is PAYE the way forward?PAYE V’s UmbrellaMany contractors and agencies get confused by umbrella, umbrella is a form of PAYE where the payroll provider deducts the standard PAYE deductions from the contractors earnings and submits these to the government. The agency provides the contractor with an ‘agency rate’ which is an uplifted rate of pay to … [Read more...]
HMRC Tackling Construction Industry Scheme Abuse
HMRC have launched a consultation concerning ways to tackle abuse of the construction industry scheme.The consultation seeks views on changes to the rules to prevent tax loss from the CIS. HMRC will have the power to correct the CIS deduction amounts claimed by sub-contractors on their Real Time Information (RTI) Employer Payment Summary (EPS) returns and seeks views on the implementation process.The 10 week consultation started on the 19th March and will conclude on the 28th May … [Read more...]
COVID-19: Changes to standard and enhanced ID checking guidelines
Due to current measures that have been put in place as a result of the coronavirus outbreak, we’re aware that organisations are having difficulty following the DBS ID checking guidance.Currently, when validating ID documents, it is best practice to carry the examination out face-to-face with a live video link as an alternative method. Under the current guidance, the ID checker must be in physical possession of the original documents so they can be checked for indicators of fraud.As the … [Read more...]
Budget 2020
With Coronavirus (COVID-19) taking up almost all media activity recently, it would have been very easy to have missed the Chancellors first Budget to parliament yesterday.In his first Budget, Chancellor Rishi Sunak unveiled a £12bn package to help the country through the coronavirus outbreak.£5bn emergency response fund to support the NHS and other public services in England All those advised to self-isolate will be entitled to statutory sick pay, even if they have not presented … [Read more...]
Why recruitment agencies are outsourcing their payroll?
It has never been a better time to be a freelance contract worker within the UK, growing numbers of agencies are becoming more and more reactive to the countries growing demand for a more flexible workforce.We have seen over a 40% growth in our business each year for the past 2 years, which is a clear sign of a change in which hirers are addressing their recruitment needs. With growth, comes further burdens to continue to grow unless processes are in place to support these … [Read more...]
What do you look for when you review your PSL?
Many agencies follow compliance processes they have internally to review the PSL of umbrella companies. However, do you really know what your workers are being charged and understand the payslip and calculations behind the figures?With the key information document, being issued to contractors from April 2020 by recruitment agencies now would be the time to check what is actually being deducted.We review payslips from competitors on a regular basis from contractors who are not happy with … [Read more...]
How do you choose the right Umbrella company?
With the changes in IR35 reform just around the corner, more and more Limited Company PSC’s that are deemed as “inside” IR35 will be required to alter their current pay structure and look at either an employed in-house PAYE or outsourced umbrella service. Many agencies run a PSL (Preferred Supplier List) to allow workers a choice of approved/accredited providers without having to search themselves and stumble on a provider that is not necessarily compliant. It is just another level of compliancy … [Read more...]
Tax avoidance schemes aimed at contractors and agency workers
HMRC is aware of schemes that claim to increase your take-home pay by paying less Income Tax and National Insurance contributions. These schemes do not work and by using them you may be taking part in tax avoidance. How these schemes work Most umbrella arrangements operate within the tax rules, and correctly deduct tax and National Insurance contributions from all your earnings using PAYE.Some promoters of tax avoidance schemes set up umbrella companies and use them to convert income into … [Read more...]
Are you calculating holiday pay at 12.07%? If so, you need to read this!
The position regarding holiday entitlement for workers with varying work patterns (particularly those who don’t work every week) was considered by the Court of Appeal in the recent case of Harpur Trust v BrazelMs Brazel is a clarinet and saxophone teacher, she worked at schools providing individual lessons to pupils. Her average working week was between 10 – 15 hours and paid by the hour and did not work during the school holidays. She was required to take her holiday entitlement during the … [Read more...]
Naming employers who fail to pay minimum wage to be resumed under revamped rules
Businesses that fail to pay their workers the National Minimum Wage or National Living Wage will continue to be publicly named by the government, following a review of the scheme. The naming scheme will resume calling out businesses failing to pay their workers the National Minimum Wage, while increasing support for employers to comply with NMW legislation. The changes, which will see naming rounds occur more often, will enhance the effectiveness of the … [Read more...]